Mercury collapse links to pub losses
The collapse of highly-rated Mercury Inns last November has been linked to large losses at two leasehold pubs — one tied and one free-of-tie — by the administrator BDO.
The company lost £390,000 on a turnover of £5.85m in the year to 29
February 2008 and £681,000 on a turnover of £4.29m in the 12 months to February 2009.
There were losses of a further £247,000 for the first five months of Mercury's 2010 financial year. Mercury saw trading losses of £161,000 at its Greene King leased Old Green Man, Little Brickhill, near Milton Keynes between March 2008 and June 2009.
Performance of the pub was "adversely affected by a new town-centre development" in Milton Keynes. The lease was surrendered back to Greene King in July 2009, but Mercury Inns also incurred a £30,000 loss in finalising the surrender.
A site called Harry's Bar, with an annual rates and rent liability of £78,000, reverted to Mercury in June 2007 after the insolvency of its lessee. "The group experienced cash-flow pressure as a result of two under-performing leasehold units, which adversely impacted trading performance," the administrator's report stated.
BDO stated that the group's management anticipated that its subsidiary Mercury Management (UK) would have a busy 2009.
"The anticipated performance target and thus the contribution to the group did not materialise, despite a significant marketing campaign."
Three Mercury Inns leasehold sites, Enterprise's the World's End and Charles Wells's Park and Olde Coach House, have been re-let to Quicksilver Management, the new name for Mercury's management company Mercury Liquid.
Mercury's four freehold properties — the Samuel Pepys, Kettering, the Red Lion, Hawkshaw, Bury, the Walton Arms, Accrington and the Villa, Preston — are being marketed by Fleurets.
